Newswise — Two students from the University of Virginia's Darden School of Business recently started a business that supplies electricity to rural villages in India by burning the rice husks that are a waste product of rice milling. So far, two rice husk generators are providing power to about 10,000 rural Indians, but the business plan calls for a rapid expansion that will put the miniature power plants in hundreds more villages within a few years.
This weekend, the duo received $50,000 and a big vote of confidence in their business plan when they won the Social Innovation Competition at the University of Texas. The Darden students, Charles "Chip" Ransler and Manoj Sinha, were judged to have the most compelling new idea to change the world. The University of Texas' RGK Center for Philanthropy and Community Service awarded the prize to their business, Husk Power Systems (huskpowersystems.com), which uses a proprietary technology to burn rice husks and generate three valuable products: electricity, waste ash that can be sold as an ingredient for cement, and a reduction in carbon emissions.
This technology provides off-grid power to rural Indian villages of 200 to 500 households. Using the husk-powered mini power plant, the team plans to offset close to 200 tons of carbon emissions per village, per year in India.
The competition's audience handed Husk Power Systems an additional $1,000 in the vote for the People's Choice award. Selecting from a competitive field of exceptional ideas, the competition judges, which included University of Texas faculty, nonprofit directors, foundation grant makers and business leaders, chose three finalist teams.
"The final pitch to the judges had all the drama and emotion of a night on 'American Idol' — but with a much loftier mission," said Peter Frumkin, director of the RGK Center for Philanthropy and Community Service.
The $50,000 award was the latest in a string of accolades that Ransler and Sinha have received for their Husk Power plans. On April 7, they picked up a $10,000 check for winning Darden's annual business plan competition. Also in April, they were selected as one of 10 finalist teams among 245 entries from 23 countries in the Global Social Venture Competition hosted by the University of California at Berkeley. Husk Power is also a top-10 finalist at this year's Ignite Clean Energy competition at MIT, where Ransler and Sinha will compete May 12 for a $125,000 top prize.
The idea for the rice husk generators was originally conceived by Sinha, who earned his engineering degree from the University of Massachusetts and holds 10 patents for work done at Intel, and Gyanesh Pandey, the third leader of Husk Power, who left an engineering career in Los Angeles to return to India and oversee the rice husk project on the ground there.
Sinha and Pandey went to college together in India and both hail from rural Indian villages that struggle with a lack of electricity. "We grew up in those areas," explained Sinha. "Our relatives still do not have electricity. We wanted to give back to those areas." Originally they envisioned refining the generator concept and raising enough money to donate rice-husk generators for two or three villages near where they grew up, said Sinha.
Then, at Darden, Sinha shared the idea with Ransler, who did a bit of research and soon suggested that the generators could be a financially viable business that could be expanded to hundreds of villages. There are 480 million Indians with no power and 350 million of them live in rural villages, concentrated in eastern India's "Rice Belt," where the villagers are "rice rich and power poor," explained Ransler.
After more research and some helpful feedback from several of the business plan competitions, said Ransler, the team realized that, with more engineering, the ash produced by burning the rice husks could be easily converted into a valuable ingredient for cement production.
On top of that, additional research revealed that the Kyoto Protocol, an international agreement to reduce greenhouse gas emissions, had established a trading program for carbon emission reductions that should enable the rice husk generators to be paid for reducing carbon emissions.
The team was struck, said Ransler, by how "these big things all work together" — three sources of revenue could be produced from what was otherwise a waste product sitting in huge piles slowly rotting in villages across India. Even with conservative electricity consumption, revenue from the three sources would allow each rice husk generator to break even in about two and a half years, and it would reduce carbon dioxide emissions by 200 tons per year, per village. Furthermore, explained Ransler, a lack of reliable electricity is one of the biggest obstacles to small business growth in rural India, so providing a village with rice-husk power can be the enabler of a dozen other small business ventures. They concluded, "someone should do this. Why shouldn't it just be us?"
But actually getting the electricity from the power plant to the various destinations — village houses, irrigation pumps, water purification units, small businesses, etc. — presented further challenges, said Ransler. Previous electrification projects in India have generally provided villages with intermittent power — often only an hour a day — coming from distant power plants (usually coal-powered), and traveling over miles of wires to reach small villages where average personal incomes are less than $20 a month.
In many cases villagers used the many hours of downtime without power to illegally tap into the main power lines for "free" electricity. Sometimes large sections of power lines were cut down and sold as scrap metal.
Husk Power has developed several strategies to combat such problems, explained Ransler. They will require pre-payment for all electricity, and they will spend more to wire the village using double-insulated wire that is more difficult to illegally tap into than standard wire. Since electrical meters cost $10 to $15 each, and an average household will consume only about $15 to $18 of electricity per year, Husk Power will instead use a $1 circuit breaker to distribute electricity to a branch line serving four or five households. A Husk Power employee in the village will conduct a basic energy audit to determine how much electrical load the branch of houses will need and will install a circuit breaker that allows only that much current to reach the houses. Any illegal tap or other excessive consumption will trip the circuit breaker, cutting off power to all four or five houses, giving the community an incentive to work together to prevent excess consumption.
With all the refinements, the business plan soon started "looking like Starbucks — you can put one of these in 125,000 locations, hire local people, and turn a raw material into money — just substitute rice husks for coffee beans," said Ransler.
What about the original motive of providing a social good to rural India? "This is basically, through capitalism, making something happen that wasn't going to happen without it," noted Ransler. "We don't see any contradiction between doing well for ourselves and doing even better for others."
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